Understanding Private Trusts
Hi
Monday 18th September we have Allegedly Dave visiting us at Nether Hayford Community Hall. It's going to be a great evening!
I wanted to clarify a couple of points on Private Trusts as I've had a few questions.
Trust Structure and Certainties
There needs to be three (3) certainties in order to create a valid trust.
In the case of Knight v Knight 1840, Lord Langdale held that: For a Trust to hold up in a court of law, there must be adherence to the three certainties.
Certainty of intention
The intent of the settlor must be certain; i.e. to hold the property for the benefit of beneficiaries. EG the settlors offspring etc.Certainty of subject matter
The property to be held in trust must be certain, i.e. the property must be uniquely identifiable.Certainty of objects
Settlor, trustee/s and beneficiary/ies must be clearly names and or identified.
Should any of these "certainties" be "uncertain" then the trust will not withstand being challenged.
An example of this is with The London Wine Company where: the wine merchant bought and held wine for clients to their order. The stock of wine was held together without distinguishing which particular bottles were held for which client. The wine merchant company went into liquidation and the claimants argued that the wine they had ordered from the shipper was held on trust for them under the terms of their contracts. However, the creditors said it belonged to the company and was part of the company’s assets in insolvency.
The court held that there could not be a valid trust because the claimants could not identify which wine was held for them out of the general store. It would have been necessary for the claimant’s wine to be segregated, that is, to be separately identifiable from the general stock of wine.
So, there is a need to identify your assets or RES very clearly when placing them into trust. Good descriptions and clear photographs can help with this. If need be place labels on the RES to clearly mark it out as TRUST PROPERTY.
Hope that helps you with creating your own Private trust.
Sovereign Steve